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Committee advances bill letting fiscally distressed districts request property sales, short interfund loans
Summary
The House Education Committee voted 10-9 to report Substitute Senate Bill 5,412 out of committee with a due‑pass recommendation after adopting an amendment that lets districts in binding conditions request authorization to sell property and take temporary interest‑free interfund loans under OSPI rules.
The House Education Committee reported Substitute Senate Bill 5,412 out of committee with a due‑pass as amended recommendation, 10‑9.
The bill allows school districts that are in "binding conditions" or under enhanced financial oversight to take a temporary, interest‑free interfund loan from their capital projects fund and, under certain conditions, to request authorization from the superintendent of public instruction to sell district property to maintain solvency. The bill also directs the Office of the Superintendent of Public Instruction (OSPI) to adopt implementing rules and makes related changes to how sale proceeds are deposited.
The committee adopted an amendment identified in the record as MOET 4 65, sponsored by Representative Callan, which the sponsor described as aimed at districts "on the verge of binding conditions" so they can act sooner to resolve financial strains while maintaining transparency. "This amendment takes into account our school districts that are right on the verge of binding conditions as they are already trying to think about how to ensure their district solvency and try to resolve their financial strains," Representative Callan said. The amendment also directs OSPI to establish rules and sets guardrails for sales and authorizations.
Representatives who supported the amendment and final recommendation said the measure provides tools for districts to focus on students rather than emergency fundraising. Representative Kallen urged a yes vote on the bill, saying the tools "are exactly meant for that" so districts can get beyond binding conditions. Representative Steele opposed the amendment and later the bill, saying additional flexibility could muddy state policy on school construction and long‑term solvency.
After debate and a clerk's roll call, the clerk announced a 10‑aye, 9‑nay result on reporting the bill with the adopted amendment. The committee then voted to incorporate the adopted amendments into a striking amendment and report the bill out of committee with a due‑pass as amended recommendation.
The bill directs OSPI to adopt rules to implement the authorization process and establishes conditions under which the superintendent may grant permission to sell district property; proponents said the rules and guardrails in the amendment aim to protect districts' ability to provide education while allowing emergency financial actions.
Votes at a glance: the standing committee report recorded a final tally of 10 ayes and 9 nays on the due‑pass as amended recommendation.
The bill will move to the full House for consideration under the legislative calendar and rulemaking by OSPI would follow if the statute is enacted.
